New Zealand’s unemployment rate rose to 5.6% in Q2, exceeding forecasts and reducing RBNZ rate hike expectations.
The NZD/USD pair fell to 0.5870 in early European trading as New Zealand’s unemployment rate climbed to 5.6% in Q2, the highest since 2015. The figure surpassed market expectations of 5.4%, signaling weaker labor market conditions.
The jump from 5.3% in Q1 follows a 0.5% rise in employment change, slightly above the prior 0.2%. Participation rates edged up to 70.7% from 70.4%. The data has dampened expectations for aggressive tightening by the Reserve Bank of New Zealand.
Traders are now focused on upcoming US economic releases, including ADP employment and ISM Services PMI, ahead of Friday’s July data. Geopolitical developments, including potential US-Iran talks, may also influence the pair’s movement.